How Should Inventory Investment be Measured in National Accounts. Presented at the NBER/CRIW Summer Institute, July 17, 2007

摘要

Net investment in inventories is also known as change in inventories (CII). The first part of this paper concerns the measurement of nominal CII at the annual frequency. The principle that the economic value of production is measured at the prices existing when the production occurred means that the definition of nominal CII must keep holding gains and losses on inventories out of the measure of GDP. Yet, however clear this requirement may be in the realm of theory, it does not translate literally into practice because the data are generally not precise enough to justify complete faith in the raw estimate of holding gains or losses on inventories. If the estimate of holding gains or losses on inventories is large, the implicit price for the annual CII it is likely to be extreme or negative. We wish to avoid the inconvenience that this causes unless we have some assurance that the large estimate is not a result of an unlucky draw of random errors in the underlying data. In the second half of the paper, we consider the question of how to measure of real investment in inventories. This statistic is important to users of the national accounts because, besides being a component of GDP, inventory investment is an important indicator of economic activity. The usual kind of application of index number theory is impossible for the problem of measuring real CII because a positive change in inventory may be preceded or followed by a zero or negative change in inventory. Besides avoiding division by values that may approach or cross over zero, our proposed measure of real CII appropriately reflects the influence of inventory investment on the measure of real GDP.